Centuria Metropolitan REIT On track
Centuria Metropolitan REIT continues to be on track to deliver its earnings guidance for FY2019 following the release of the 1H results this week.
Having recently disposed on the last of the industrial style assets from the trust, the REIT has now become a pure play metropolitan office vehicle boosting 20 high quality commercial assets worth $1.4bn. The recent acquisition of the $520M Hines portfolio was a highlight for the period.
The portfolio has enjoyed the recent boom in tenancy demand with an occupancy of 98.8%, a WALE of 4.3 years and a dominance of multinational, ASX and government tenants (75%).
Valuations for 1H19 were up 3.1% with cap rate compression of 11bps contributing about 50% of the gain.
The trust increased its income by 35% to $46.6m due predominantly to the Hines portfolio acquisition which was funded by additional debt and equity. Funds from Operations per unit subsequently decreased by 3.2% to 9.39cpu and distributions decreased by 1.8% to 8.88 cpu. The distribution yield as at the 31st December closing price was 7.4% down slightly from 7.7%.
Centuria confirmed their earlier FY19 distribution guidance of 17.6 cents per and a forecast distribution yield of 7.4% p.a.
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